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Monday, November 8, 2010

Stock Market and Commodities Commentary For Monday Evening No. 8th

The S&P 500 index posted an inside day with a lower close on Monday as it consolidated some of this fall's rally. The high range close sets the stage for a steady to higher opening on Tuesday. Stochastics and the RSI are overbought but remain neutral to bullish signaling that sideways to higher prices are possible near term. If December extends the rally off August's low, the 62% retracement level of the 2007-2009 decline crossing at 1234.75 is the next upside target. Closes below the 20 day moving average crossing at 1184.83 are needed to confirm that a short term top has been posted. First resistance is last Friday's high crossing at 1224.20. Second resistance is the 62% retracement level of the 2007-2009 decline crossing at 1234.75. First support is the 10 day moving average crossing at 1195.37. Second support is the 20 day moving average crossing at 1184.84.

Crude oil closed higher on Monday as it extends the rally off August's low. The high range close sets the stage for a steady to higher opening on Tuesday. Stochastics and the RSI are overbought but remain neutral to bullish signaling that sideways to higher prices are possible near term. If December extends the aforementioned rally, the 75% retracement level of May's decline crossing at 88.07 is the next upside target. Closes below the 20 day moving average crossing at 83.13 would confirm that a short term top has been posted. First resistance is today's high crossing at 87.49. Second resistance is the 75% retracement level of May's decline crossing at 88.07. First support is the 10 day moving average crossing at 83.99. Second support is the 20 day moving average crossing at 83.13.

Natural gas closed higher on Monday as it extends the rebound off last Thursday's low. Stochastics and the RSI are turning bullish with today's rally signaling that sideways to higher prices are possible near term. If December extends the rally off October's low, the reaction high crossing at 4.207 is the next upside target. Closes below last Thursday's low crossing at 3.743 would confirm that a short term top has been posted. First resistance is last Monday's high crossing at 4.187. Second resistance is the reaction high crossing at 4.207. First support is last Thursday's low crossing at 3.743. Second support is the reaction low crossing at 3.500.

Gold closed higher on Monday and above 1400 as it posted another new all time high. The high range close sets the stage for a steady to higher opening on Tuesday. Stochastics and the RSI remain bullish signaling that sideways to higher prices is possible near term. If December extends this year's rally into uncharted territory, upside targets will now be hard to project. Closes below the reaction low crossing at 1315.60 would confirm that a short term top has been posted. First resistance is today's high crossing at 1410.40. First support is the 10 day moving average crossing at 1359.40. Second support is the reaction low crossing at 1315.60.

The U.S. Dollar closed higher due to short covering on Monday as it consolidates some of this year's decline. The high range close sets the stage for a steady to higher opening on Tuesday. Stochastics and the RSI are turning neutral hinting that a short term low might be in or is near. Closes above the reaction high crossing at 78.61 are needed to confirm that a short term low has been posted. If December extends the decline off August's high, the November 2009 low on the weekly continuation chart crossing at 74.21 is the next downside target. First resistance is the reaction high crossing at 78.51. Second resistance is the reaction high crossing at 78.61. First support is last Wednesday's low crossing at 75.24. Second support is the November 2009 low on the weekly continuation chart crossing at 74.21.